The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the Energy Select Sector SPDR Fund (XLE) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and XLE is a SPDR State Street Global Advisors Equity Energy fund. So, what’s the difference between VXUS and XLE? And which fund is better?
The expense ratio of VXUS is 0.04 percentage points lower than XLE’s (0.08% vs. 0.12%). VXUS also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VXUS has provided higher returns than XLE over the past ten years.
In this article, we’ll compare VXUS vs. XLE. We’ll look at portfolio growth and risk metrics, as well as at their annual returns and performance. Moreover, I’ll also discuss VXUS’s and XLE’s holdings, industry exposure, and fund composition and examine how these affect their overall returns.
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Summary
| VXUS | XLE | |
| Name | Vanguard Total International Stock Index Fund ETF Shares | Energy Select Sector SPDR Fund |
| Category | Foreign Large Blend | Equity Energy |
| Issuer | Vanguard | SPDR State Street Global Advisors |
| AUM | 404.73B | 25.55B |
| Avg. Return | 8.41% | 1.28% |
| Div. Yield | 2.44% | 3.92% |
| Expense Ratio | 0.08% | 0.12% |
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 404.73B total assets under management and has yielded an average annual return of 8.41% over the past 10 years. The fund has a dividend yield of 2.44% with an expense ratio of 0.08%.
The Energy Select Sector SPDR Fund (XLE) is a Equity Energy fund that is issued by SPDR State Street Global Advisors. It currently has 25.55B total assets under management and has yielded an average annual return of 1.28% over the past 10 years. The fund has a dividend yield of 3.92% with an expense ratio of 0.12%.
VXUS’s dividend yield is 1.48% lower than that of XLE (2.44% vs. 3.92%). Also, VXUS yielded on average 7.13% more per year over the past decade (8.41% vs. 1.28%). The expense ratio of VXUS is 0.04 percentage points lower than XLE’s (0.08% vs. 0.12%).
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Fund Composition
Industry Exposure
| VXUS | XLE | |
| Technology | 13.07% | 0.0% |
| Industrials | 12.94% | 0.0% |
| Energy | 4.55% | 100.0% |
| Communication Services | 7.06% | 0.0% |
| Utilities | 2.94% | 0.0% |
| Healthcare | 9.19% | 0.0% |
| Consumer Defensive | 7.83% | 0.0% |
| Real Estate | 3.79% | 0.0% |
| Financial Services | 17.64% | 0.0% |
| Consumer Cyclical | 12.64% | 0.0% |
| Basic Materials | 8.37% | 0.0% |
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has the most exposure to the Financial Services sector at 17.64%. This is followed by Technology and Industrials at 13.07% and 12.94% respectively. Real Estate (3.79%), Energy (4.55%), and Communication Services (7.06%) only make up 15.40% of the fund’s total assets.
VXUS’s mid-section with moderate exposure is comprised of Consumer Defensive, Basic Materials, Healthcare, Consumer Cyclical, and Industrials stocks at 7.83%, 8.37%, 9.19%, 12.64%, and 12.94%.
The Energy Select Sector SPDR Fund (XLE) has the most exposure to the Energy sector at 100.0%. This is followed by Technology and Industrials at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.
XLE’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
VXUS is 17.64% more exposed to the Financial Services sector than XLE (17.64% vs 0.0%). VXUS’s exposure to Technology and Industrials stocks is 13.07% higher and 12.94% higher respectively (13.07% vs. 0.0% and 12.94% vs. 0.0%). In total, Real Estate, Energy, and Communication Services also make up 84.60% less of the fund’s holdings compared to XLE (15.40% vs. 100.00%).
Holdings
| VXUS Holdings | Weight |
| Taiwan Semiconductor Manufacturing Co Ltd | 1.62% |
| Tencent Holdings Ltd | 1.41% |
| Alibaba Group Holding Ltd Ordinary Shares | 1.26% |
| Nestle SA | 1.1% |
| Samsung Electronics Co Ltd | 1.05% |
| ASML Holding NV | 0.86% |
| Roche Holding AG | 0.81% |
| Toyota Motor Corp | 0.67% |
| LVMH Moet Hennessy Louis Vuitton SE | 0.61% |
| Novartis AG | 0.6% |
VXUS’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, and Samsung Electronics Co Ltd at 1.62%, 1.41%, 1.26%, 1.1%, and 1.05%.
ASML Holding NV (0.86%), Roche Holding AG (0.81%), and Toyota Motor Corp (0.67%) have a slightly smaller but still significant weight. LVMH Moet Hennessy Louis Vuitton SE and Novartis AG are also represented in the VXUS’s holdings at 0.61% and 0.6%.
| XLE Holdings | Weight |
| Exxon Mobil Corp | 23.7% |
| Chevron Corp | 20.03% |
| ConocoPhillips | 4.64% |
| EOG Resources Inc | 4.46% |
| Schlumberger Ltd | 4.43% |
| Marathon Petroleum Corp | 4.17% |
| Pioneer Natural Resources Co | 4.08% |
| Phillips 66 | 4.07% |
| Kinder Morgan Inc Class P | 3.85% |
| Williams Companies Inc | 3.5% |
XLE’s Top Holdings are Exxon Mobil Corp, Chevron Corp, ConocoPhillips, EOG Resources Inc, and Schlumberger Ltd at 23.7%, 20.03%, 4.64%, 4.46%, and 4.43%.
Marathon Petroleum Corp (4.17%), Pioneer Natural Resources Co (4.08%), and Phillips 66 (4.07%) have a slightly smaller but still significant weight. Kinder Morgan Inc Class P and Williams Companies Inc are also represented in the XLE’s holdings at 3.85% and 3.5%.
Risk Analysis
| VXUS | XLE | |
| Mean Return | 0.56 | 0.32 |
| R-squared | 98.39 | 61.84 |
| Std. Deviation | 15.12 | 27.52 |
| Alpha | 0.31 | -11.98 |
| Beta | 0.99 | 1.54 |
| Sharpe Ratio | 0.4 | 0.12 |
| Treynor Ratio | 5.14 | -0.4 |
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Alpha of 0.31 with a R-squared of 98.39 and a Beta of 0.99. Its Mean Return is 0.56 while VXUS’s Treynor Ratio is 5.14. Furthermore, the fund has a Sharpe Ratio of 0.4 and a Standard Deviation of 15.12.
The Energy Select Sector SPDR Fund (XLE) has a Mean Return of 0.32 with a Treynor Ratio of -0.4 and a R-squared of 61.84. Its Standard Deviation is 27.52 while XLE’s Beta is 1.54. Furthermore, the fund has a Sharpe Ratio of 0.12 and a Alpha of -11.98.
VXUS’s Mean Return is 0.24 points higher than that of XLE and its R-squared is 36.55 points higher. With a Standard Deviation of 15.12, VXUS is slightly less volatile than XLE. The Alpha and Beta of VXUS are 12.29 points higher and 0.55 points lower than XLE’s Alpha and Beta.
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Performance
Annual Returns
| Year | VXUS | XLE |
| 2020 | 11.32% | -32.56% |
| 2019 | 21.58% | 11.87% |
| 2018 | -14.42% | -18.1% |
| 2017 | 27.52% | -1.01% |
| 2016 | 4.72% | 27.95% |
| 2015 | -4.28% | -21.47% |
| 2014 | -4.17% | -8.61% |
| 2013 | 15.16% | 26.16% |
| 2012 | 18.22% | 5.17% |
| 2011 | 0.0% | 2.98% |
| 2010 | 0.0% | 21.7% |
VXUS had its best year in 2017 with an annual return of 27.52%. VXUS’s worst year over the past decade yielded -14.42% and occurred in 2018. In most years the Vanguard Total International Stock Index Fund ETF Shares provided moderate returns such as in 2010, 2016, and 2020 where annual returns amounted to 0.0%, 4.72%, and 11.32% respectively.
The year 2016 was the strongest year for XLE, returning 27.95% on an annual basis. The poorest year for XLE in the last ten years was 2020, with a yield of -32.56%. Most years the Energy Select Sector SPDR Fund has given investors modest returns, such as in 2017, 2011, and 2012, when gains were -1.01%, 2.98%, and 5.17% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VXUS | $10,000 | $19,315 | 8.41% |
| XLE | $10,000 | $7,452 | 1.28% |
A $10,000 investment in VXUS would have resulted in a final balance of $19,315. This is a profit of $9,315 over 9 years and amounts to a compound annual growth rate (CAGR) of 8.41%.
With a $10,000 investment in XLE, the end total would have been $7,452. This equates to a $-2,548 profit over 9 years and a compound annual growth rate (CAGR) of 1.28%.
VXUS’s CAGR is 7.13 percentage points higher than that of XLE and as a result, would have yielded $11,863 more on a $10,000 investment. Thus, VXUS outperformed XLE by 7.13% annually.
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